[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-287163-105":3,"detail-sidebar-cat-1-en-105":80,"doc-detail-287163-en":126},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":73,"head_meta":75,"extra_data":77,"updated_unix":79},105,"en","civil-litigation-developing-remedies-for-llc-members","Civil Litigation - Developing remedies for LLC members","","A legal analysis outlines how limited liability companies (LLCs) in New York combine corporate and partnership features, while emphasizing that members often rely on operating agreements under LLCL §417. It explains how courts address disputes and misconduct between members, including access to books, decision-making, exit strategies, and common “default” rules when no agreement exists. The piece surveys case law recognizing fiduciary duties and allowing derivative suits, equitable accountings, and buyouts by analogy, despite limited statutory remedies.",{"@graph":14,"@context":72},[15,34,55],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/template/","Template",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/template/forms/","Forms",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/template/civil-litigation-developing-remedies-for-llc-members/287163/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/civil-litigation-developing-remedies-for-llc-members/287163.png","ImageObject",442,249,{"name":42,"@type":43},"Mimi","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-09-26","2026-09-17",true,{"@type":52,"interactionType":53,"userInteractionCount":26},"InteractionCounter",{"@type":54},"ViewAction",{"@type":56,"mainEntity":57},"FAQPage",[58,64,68],{"name":59,"@type":60,"acceptedAnswer":61},"What does LLCL §417 require LLC members to adopt?","Question",{"text":62,"@type":63},"LLCL §417 requires members to adopt an operating agreement addressing the LLC’s business, the conduct of its affairs, and the rights and responsibilities of members, managers, employees, or agents.","Answer",{"name":65,"@type":60,"acceptedAnswer":66},"Do courts allow LLC members to bring derivative actions even though the LLCL is silent?",{"text":67,"@type":63},"Yes. In Tzolis v. Wolff, the Court of Appeals held that LLC members may sue derivatively despite the LLCL not expressly authorizing such actions.",{"name":69,"@type":60,"acceptedAnswer":70},"Can an LLC member seek an equitable accounting or a buyout?",{"text":71,"@type":63},"Yes. Gottlieb v. Northriver Trading Co., LLC recognizes an equitable accounting under common law. For buyouts, courts have approved buyout-style liquidation methods despite the LLCL’s lack of explicit buyout authorization in dissolution avoidance contexts.","https://schema.org",{"og:url":32,"og:type":74,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":76,"canonical":32},"index,follow",{"doc_id":78,"site_id":7},287163,1790410502,{"code":4,"msg":81,"data":82},"success",[83,88,93,98,103,108,112,117,122],{"id":84,"doc_module":22,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},11,"Presentations",90,"presentations",{"id":89,"doc_module":22,"doc_module_name":25,"category_name":90,"show_sort_weight":91,"slug":92},12,"Resumes",80,"resumes",{"id":94,"doc_module":22,"doc_module_name":25,"category_name":95,"show_sort_weight":96,"slug":97},14,"Invoices",70,"invoices",{"id":99,"doc_module":22,"doc_module_name":25,"category_name":100,"show_sort_weight":101,"slug":102},15,"Posters",60,"posters",{"id":104,"doc_module":22,"doc_module_name":25,"category_name":105,"show_sort_weight":106,"slug":107},16,"Social Media",50,"social-media",{"id":109,"doc_module":22,"doc_module_name":25,"category_name":29,"show_sort_weight":110,"slug":111},17,40,"forms",{"id":113,"doc_module":22,"doc_module_name":25,"category_name":114,"show_sort_weight":115,"slug":116},18,"Letters",30,"letters",{"id":118,"doc_module":22,"doc_module_name":25,"category_name":119,"show_sort_weight":120,"slug":121},21,"Paper Templates",5,"papers-templates",{"id":123,"doc_module":22,"doc_module_name":25,"category_name":124,"show_sort_weight":4,"slug":125},158,"General","general-158",{"code":4,"msg":81,"data":127},{"doc_id":78,"user_id":128,"nickname":42,"user_avatar":129,"doc_module":22,"category_id":109,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":30,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":26,"language":135,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":136,"faqs":137,"seo_title":138,"seo_description":12,"update_tm":139,"read_time":22},2336477974920,"https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d","Monday, July 16, 2012  \nTHE DAILY RECORD  \nWESTERN NEW YORK’S SOURCE FOR LAW, REAL ESTATE, FINANCE AND GENERAL INTELLIGENCE SINCE 1908  \nCivilLITIGATION  \nDeveloping remedies for LLC members  \nLimited liability companies appeared in New York state in 1994, when the New York Limited Liability Company Law (LLCL) went into effect. An LLC is an unincorporated organization (but not a partnership or a trust) of one or more persons having limited liability for the contractual obligations and other liabilities of the business.  \nThe LLC combines aspects of the corporate form and the partnership form. An LLC can be used to limit the personal liability of its owners (called members) like a corporation, and offers flexibility in management and operations, capital formation, and the allocation and distribution of benefits like a partnership. Last, but certainly not least in the minds of business owners who use the LLC form, the LLC may provide significant tax advantages to those owners.  \nLLCL §417 requires the LLC’s members to adopt an operating agreement addressing the business of the LLC, the conduct of its affairs, and the rights, powers, preferences, limitations or responsibilities of its members, managers, employees or agents.  \nA well-considered operating agreement should address, among other things, decision-making proce  \ndures, access to the business’ books and records and exit strategies such as buyout provisions. In the absence of an operating agreement, and in the event of legal action, a court will enforce the rights and obligations in issue by reference to the “default” provisions of the LLCL.  \nBusiness owners may choose the LLC form without much thought (and sometimes without an operating agreement), or they may elect to form an LLC in consultation with lawyers experienced in business formation and tax law. Either way, the members hope common goals and the LLC form will lead to financial success.  \nHowever, sometimes members may encounter irreconcilable differences even when dealing with one another in good faith, and sometimes one member’s intentional misconduct, such as fraud, misappropriation, and misuse of LLC assets for personal gain, will cause harm to the LLC, and the other member or members will be forced to go to court to protect the LLC and their ownership interests, or to obtain a remedy that will extricate them from an untenable situation.  \nWhile the LLCL provides for judicial dissolution under certain limited circumstances, it does not expressly provide an aggrieved member with remedies such as the right to bring a derivative action, the right to an accounting or the right to a buyout of her ownership  \ninterest. Therefore, given the hybrid nature of the LLC form, lawyers who handle “business divorce” cases have advocated, and the courts have evaluated, an LLC member’s potential remedies by analogy, using the Business Corporation Law (BCL), the Partnership Law, and the common law.  \nAt the threshold level, the courts have recognized that members of LLCs owe fiduciary duties to one another, see, e.g., McGuire Children LLC v. Huntress, 24 Misc.3d 1202A (Erie Sup. Ct. 2009), aff’d 83 A.D.3d 1418 (4th Dept. 2011); Willoughby Rehabilitation and Health Care Center LLC v. Webster, 13 Misc.3d 1230A (N.Y. Sup. Ct. 2006), aff’d 46 A.D.3d 801 (2nd Dept. 2007). These decisions, which analogize a member’s duties to other members to a partner’s duties to other partners, provide a foundation for the advocacy of a member’s rights and remedies in the face of misconduct by other members.  \nIn Tzolis v. Wolff, 10 N.Y.3d 100 (2008), the Court of Appeals held that LLC members may sue derivatively, even though the LLCL does not expressly authorize such actions. The court, after reviewing the development of the law authorizing derivative actions on behalf of trusts, corporations and limited partnerships, found that an LLC  \nmember had the right to bring a derivative action, stating  \nthat “to hold that there is no remedy when corp","cbCaifQtrmoXqI7c","https://ap.wps.com/l/cbCaifQtrmoXqI7c","pdf",161521,"English","# Civil Litigation\n## Developing remedies for LLC members\n## Operating agreements and default LLCL provisions\n## Fiduciary duties and derivative actions\n## Accounting and equitable remedies\n## Dissolution and buyout approaches","[{\"question\":\"What does LLCL §417 require LLC members to adopt?\",\"answer\":\"LLCL §417 requires members to adopt an operating agreement addressing the LLC’s business, the conduct of its affairs, and the rights and responsibilities of members, managers, employees, or agents.\"},{\"question\":\"Do courts allow LLC members to bring derivative actions even though the LLCL is silent?\",\"answer\":\"Yes. In Tzolis v. Wolff, the Court of Appeals held that LLC members may sue derivatively despite the LLCL not expressly authorizing such actions.\"},{\"question\":\"Can an LLC member seek an equitable accounting or a buyout?\",\"answer\":\"Yes. Gottlieb v. Northriver Trading Co., LLC recognizes an equitable accounting under common law. For buyouts, courts have approved buyout-style liquidation methods despite the LLCL’s lack of explicit buyout authorization in dissolution avoidance contexts.\"}]","Civil Litigation - Developing remedies for LLC members | PDF",1789631972]